-- Results In-Line with March 20
Preannouncement --
-- Issues FY24 Guidance with Expectation for
Accelerating Sales Growth --
Danimer Scientific, Inc. (NYSE: DNMR) (“Danimer” or the
“Company”), a leading next generation bioplastics company focused
on the development and production of biodegradable materials,
announced today financial results for its fourth quarter and full
year, ended December 31, 2023.
Stephen E. Croskrey, Chairman and Chief Executive Officer of
Danimer, commented, “While 2023 was a challenging year for the
Company, we are greatly encouraged by the successes we had and we
believe we remain well ahead of the competition in both deep
understanding of the biodegradable plastics industry and the
available production capacity to meet current and future customers’
needs. We are excited for the year ahead and focused on leveraging
our global market-leadership position in PHA-based materials to
drive value to our customers, partners and shareholders.
Croskrey continued, “We maintain a strong belief that we will
significantly grow our business in 2024 as we continue to fulfill
our mission to eliminate plastic pollution from petroleum-based
plastics through the adoption and use of PHA-based materials as
biodegradable alternatives in a variety of end markets. Our
recently completed equity offering transaction enhances our
operational liquidity runway and should enable us to support this
expected growth.”
Fourth Quarter 2023 Financial Highlights:
- Revenues were $10.9 million in the fourth quarter of 2023
compared to revenue of $15.3 million in the fourth quarter of 2022.
While PHA revenue increased by $0.9 million in the quarter as
compared with the prior year quarter, loss of shipments to
customers affected by the conflict in Ukraine reduced the
quarter-over-quarter PLA revenue by $4.9 million, leading to a net
reduction in product revenue of $4.0 million.
- Gross profit was $(6.4) million compared to $(2.7) million in
the fourth quarter of 2022. Adjusted gross profit was $(1.2)
million compared to $2.0 million in the fourth quarter of
2022.
- Adjusted EBITDA was $(10.7) million in the fourth quarter of
2023 compared to $(8.6) million in the fourth quarter of 2022.
Full Year 2023 Financial Highlights:
- Revenues were $46.7 million for the full year of 2023 compared
to $53.2 million in the prior year. PHA-related sales grew by 6
percent over the prior year and represented 69 percent of 2023
product revenues. PLA-based product sales declined $6.1 million
from the prior year, which as noted above was primarily due to the
conflict in Ukraine.
- Gross profit for 2023 was $(27.0) million compared to $(10.4)
million for the prior period. Adjusted gross profit was $(6.5)
million in 2023 compared to $2.0 million in 2022, primarily driven
by higher fixed cost per unit absorption.
- Adjusted EBITDA was $(39.0) million for the full year of 2023
compared to $(45.0) million for the full year of 2022. The year
over year improvement in Adjusted EBITDA primarily reflects the
Company’s comprehensive program of expense control measures.
- Unrestricted cash and cash equivalents at December 31, 2023 was
$59.2 million, which does not include $14.3 million of restricted
cash that is mainly held for future interest payments under the
Company’s existing $130 million Senior Secured Term Loan.
- Full-year capital expenditures were $27.7 million, consistent
with the Company’s most recent guidance of $27 million to $29
million.
Capital Structure
At December 31, 2023, the Company reported total debt
outstanding of $382.8 million, which included approximately $45.7
million dollars of low-interest New Markets Tax Credit loans that
the Company expects will be forgiven beginning in 2026.
On March 20, 2024, we executed an equity offering which provided
the Company with over $13 million in additional liquidity. This
event improves the Company’s liquidity position and enables it to
maintain strategic and operational flexibility as it executes its
growth strategy. The Company noted that the effect of this
transaction is not reflected in its December 31, 2023, financial
statements.
Outlook
Michael Hajost, Danimer’s Chief Financial Officer, commented,
“We are intently focused on revenue growth, which we expect to
accelerate during the second half of 2024. As a result, we expect
improvement in operating margins and operating cash flow as we move
through the year.
For the full year 2024, the Company today provided the following
guidance:
- Full-year Adjusted EBITDA is expected to be in the range of
$(22) million to $(32) million. The improvement in Adjusted EBITDA
compared to the $(39.0) million reported for 2023 is expected to
result primarily from revenue growth in PHA-based resins and the
related benefits of scale captured by the Company’s Kentucky
manufacturing operations. In addition, the Company’s on-going
initiatives to improve efficiency and reduce costs are expected to
have a favorable year-over-year impact on both R&D and SG&A
expenses.
- Full-year capital expenditures are anticipated to be in the
range of $8 million to $10 million, to support existing commitments
related to the Bainbridge greenfield facility, maintenance
expenditures and other capital projects.
- The Company's unrestricted cash balance is expected to be in
the range of $20 to $25 million at the end of fiscal 2024. This
ending cash balance range is driven by the Adjusted EBITDA range,
as a proxy for cash flow, the capital expenditures range, the known
cash interest for the year based on the Company's current debt
structure, the net cash received from the recent equity issuance
and significant expected improvements in working capital.
Webcast, Conference Call and 10-K Filing
The Company will host a webcast and conference call today,
Thursday, March 28, 2024, at 4:30 p.m. Eastern time to review
fourth quarter and full-year 2023 results, discuss recent events
and conduct a question-and-answer session. The live webcast of the
conference call can be accessed on the Investor Relations section
of the Company’s website at
https://ir.danimerscientific.com. For those unable to access
the webcast, the conference call will be accessible domestically or
internationally, by dialing 1-888-886-7786 or 1-416-764-8658,
respectively. Upon dialing in, please request to join the Danimer
Scientific Fourth Quarter 2023 Earnings Conference Call. The
archived webcast will be available for replay on the Company's
website after the call.
About Danimer Scientific
Danimer is a pioneer in creating more sustainable, more natural
ways to make plastic products. For more than a decade, its
renewable and sustainable biopolymers have helped create plastic
products that are biodegradable and compostable and return to
nature instead of polluting our lands and waters. Danimer’s
technology can be found in a vast array of plastic end products
that people use every day. Applications for its biopolymers include
additives, aqueous coatings, fibers, filaments, films and
injection-molded articles, among others. Danimer holds more than
480 granted patents and pending patent applications in more than 20
countries for a range of manufacturing processes and biopolymer
formulations. For more information, visit
https://danimerscientific.com.
Forward‐Looking Statements
Please note that in this press release we may use words such as
“appears,” “anticipates,” “believes,” “plans,” “expects,”
“intends,” “future,” and similar expressions which constitute
forward-looking statements within the meaning of the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include, without limitation, statements
regarding our expectations for the full year 2024 capital
expenditures, Adjusted EBITDA and cash balances. Forward-looking
statements are made based on our expectations and beliefs
concerning future events impacting the Company and therefore
involve a number of risks and uncertainties. We caution that
forward-looking statements are not guarantees and that actual
results could differ materially from those expressed or implied in
the forward-looking statements. Potential risks and uncertainties
that could cause the actual results of operations or financial
condition of the Company to differ materially from those expressed
or implied by forward-looking statements in this release include,
but are not limited to, the overall level of consumer demand on our
products; general economic conditions and other factors affecting
consumer confidence, preferences, and behavior; disruption and
volatility in the global currency, capital, and credit markets; the
financial strength of the Company's customers; the Company's
ability to implement its business strategy, including, but not
limited to, its ability to expand its production facilities and
plants to meet customer demand for its products and the timing
thereof; risks relating to the uncertainty of the projected
financial information with respect to the Company; the ability of
the Company to execute and integrate acquisitions; changes in
governmental regulation, legislation or public opinion relating to
our products; the Company’s exposure to product liability or
product warranty claims and other loss contingencies; disruptions
and other impacts to the Company’s business, as a result of the
COVID-19 global pandemic and government actions and restrictive
measures implemented in response; stability of the Company’s
manufacturing facilities and suppliers, as well as consumer demand
for our products, in light of disease epidemics and health-related
concerns such as the COVID-19 global pandemic; the impact on our
business, operations and financial results from the ongoing
conflict in Ukraine; the impact that global climate change trends
may have on the Company and its suppliers and customers; the
Company's ability to protect patents, trademarks and other
intellectual property rights; any breaches of, or interruptions in,
our information systems; the ability of our information technology
systems or information security systems to operate effectively,
including as a result of security breaches, viruses, hackers,
malware, natural disasters, vendor business interruptions or other
causes; our ability to properly maintain, protect, repair or
upgrade our information technology systems or information security
systems, or problems with our transitioning to upgraded or
replacement systems; the impact of adverse publicity about the
Company and/or its brands, including without limitation, through
social media or in connection with brand damaging events and/or
public perception; fluctuations in the price, availability and
quality of raw materials and contracted products as well as foreign
currency fluctuations; our ability to utilize potential net
operating loss carryforwards; and changes in tax laws and
liabilities, tariffs, legal, regulatory, political and economic
risks. More information on potential factors that could affect the
Company's financial results is included from time to time in the
Company's public reports filed with the Securities and Exchange
Commission, including the Company's Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K.
All forward-looking statements included in this press release are
based upon information available to the Company as of the date of
this press release, and speak only as of the date hereof. We assume
no obligation to update any forward-looking statements to reflect
events or circumstances after the date of this press release.
Danimer Scientific,
Inc.
Condensed Consolidated Balance
Sheets
December 31,
December 31,
(in thousands, except share and per share data)
2023
2022
Assets: Current assets: Cash and cash equivalents
$
59,170
$
62,792
Accounts receivable, net
15,227
17,989
Other receivables, net
652
1,635
Inventories, net
25,270
32,743
Prepaid expenses and other current assets
4,714
5,225
Contract assets, net
3,005
4,687
Total current assets
108,038
125,071
Property, plant and equipment, net
445,153
453,949
Intangible assets, net
77,790
80,941
Right-of-use assets
19,160
19,028
Leverage loans receivable
31,446
31,446
Restricted cash
14,334
1,609
Other assets
2,210
226
Total assets
$
698,131
$
712,270
Liabilities and Stockholders' Equity: Current
liabilities: Accounts payable
$
5,292
$
14,977
Accrued liabilities
4,726
5,001
Unearned revenue and contract liabilities
1,000
-
Current portion of lease liability
3,337
3,337
Current portion of long-term debt, net
1,368
1,972
Total current liabilities
15,723
25,287
Long-term lease liability, net
21,927
22,114
Long-term debt, net
381,436
286,398
Deferred income taxes
-
200
Other long-term liabilities
1,025
659
Total liabilities
$
420,111
$
334,658
Stockholders' equity: Common stock, $0.0001
par value; 200,000,000 shares authorized: 102,832,103 and
101,804,454 shares issued and outstanding at December 31, 2023 and
December 31, 2022, respectively
$
10
$
10
Additional paid-in capital
732,131
676,250
Accumulated deficit
(454,121
)
(298,648
)
Total stockholders’ equity
278,020
377,612
Total liabilities and stockholders’ equity
$
698,131
$
712,270
Danimer Scientific,
Inc.
Condensed Consolidated
Statements of Operations
Years Ended December
31,
Years Ended December
31,
(in thousands, except share and per share data)
2023
2022
2023
2022
Revenue: Products
$
10,476
$
14,530
$
44,200
$
48,420
Services
469
794
2,484
4,798
Total revenue
10,945
15,324
46,684
53,218
Costs and expenses: Cost of revenue
17,317
18,026
73,644
63,632
Selling, general and administrative
16,885
19,547
68,983
81,589
Research and development
7,575
7,470
29,242
31,939
Loss on sale of assets
12
-
246
1
Impairment of long-lived assets
188
-
188
63,491
Total costs and expenses
41,977
45,043
172,303
240,652
Loss from operations
(31,032
)
(29,719
)
(125,619
)
(187,434
)
Nonoperating income (expense) Gain on remeasurement of private
warrants
108
752
207
9,366
Interest, net
(8,509
)
474
(29,641
)
(1,723
)
Loss on loan extinguishment
-
-
(102
)
(1,500
)
Other, net
1
399
1
723
Total nonoperating income (expense):
(8,400
)
1,625
(29,535
)
6,866
Loss before income taxes
(39,432
)
(28,094
)
(155,154
)
(180,568
)
Income taxes
(2
)
43
(319
)
810
Net loss
$
(39,434
)
$
(28,051
)
$
(155,473
)
$
(179,758
)
Basic net loss per share
$
(0.39
)
$
(0.28
)
$
(1.52
)
$
(1.78
)
Weighted average shares outstanding
102,144,873
101,397,811
102,001,812
101,095,341
Danimer Scientific,
Inc.
Condensed Consolidated
Statements of Cash Flows
Years Ended
December 31,
(in thousands)
2023
2022
Cash flows from operating activities: Net loss
$
(155,473
)
$
(179,758
)
Adjustments to reconcile net loss to net cash used in operating
activities: Impairment of long-lived assets
188
63,491
Stock-based compensation
56,035
56,958
Depreciation and amortization
29,377
20,453
Amortization of debt issuance costs
8,990
2,104
Accounts receivable reserves
(1,422
)
1,904
Inventory reserves
949
101
Loss on extinguishment of debt
102
1,500
Contract asset reserve
-
1,216
Gain on remeasurement of private warrants
(207
)
(9,366
)
Deferred income taxes
(199
)
(814
)
Amortization of right-of-use assets and lease liability
(319
)
(367
)
Loss on disposal of assets
246
-
Other
967
62
Changes in operating assets and liabilities, net of effects of
acquisition: Accounts receivable
4,184
(3,056
)
Other receivables
595
2,513
Inventories, net
6,481
(11,170
)
Prepaid expenses and other current assets
2,599
2,662
Contract assets
(1,011
)
(1,853
)
Other assets
(119
)
(479
)
Accounts payable
(635
)
(1,565
)
Accrued liabilities
604
(5,969
)
Other long-term liabilities
(196
)
(190
)
Unearned revenue and contract liabilities
1,000
(214
)
Net cash used in operating activities
(47,264
)
(61,837
)
Cash flows from investing activities: Purchases of property, plant
and equipment and intangible assets
(27,685
)
(164,486
)
Investment in leverage loans receivable related to NMTC financing
-
(18,037
)
Acquisition of Novomer, net of cash acquired
-
(14
)
Proceeds from sales of property, plant and equipment
22
55
Net cash used in investing activities
(27,663
)
(182,482
)
Cash flows from financing activities: Proceeds from long-term debt
130,000
24,700
Cash paid for debt issuance costs
(33,296
)
(1,591
)
Principal payments on long-term debt
(13,030
)
(1,504
)
Proceeds from employee stock purchase plan
281
377
Proceeds from issuance of common stock, net of issuance costs
225
(236
)
Proceeds from exercise of stock options
-
215
Employee taxes related to stock-based compensation
(150
)
(154
)
Cost related to warrants
-
(55
)
Net cash provided by financing activities
84,030
21,752
Net increase (decrease) in cash and cash equivalents and restricted
cash
9,103
(222,567
)
Cash and cash equivalents and restricted cash-beginning of period
64,401
286,968
Cash and cash equivalents and restricted cash-end of period
$
73,504
$
64,401
Non-GAAP Financial Measures
This press release includes the non-GAAP financial measures
“Adjusted EBITDA”, “Adjusted gross profit” and "Adjusted gross
margin". Danimer management views these metrics as a useful way to
look at the performance of its operations between periods and to
exclude decisions on capital investment and financing that might
otherwise impact the review of profitability of the business based
on present market conditions.
Adjusted EBITDA is defined as net income or loss plus net
interest expense, income taxes, depreciation and amortization, as
adjusted to add back certain charges or gains that Danimer may
record each period such as remeasurement of private warrants,
stock-based compensation expense, as well as non-recurring charges
such as (i) asset disposal gains or losses as well as other
significant gains or losses such as debt extinguishments and
impairment of goodwill; (ii) legal settlements; or (iii) other
discrete non-recurring items. Danimer believes these items are not
considered an indicator of ongoing performance. Adjusted EBITDA is
not a measure of performance defined in accordance with GAAP. The
measure is used as a supplement to GAAP results in evaluating
certain aspects of Danimer’s business, as described below.
Adjusted gross profit is defined as gross profit plus
depreciation, stock-based compensation and other nonrecurring
items.
Adjusted gross margin is defined as adjusted gross profit
divided by total revenue.
Danimer believes that each of Adjusted EBITDA, Adjusted gross
profit and Adjusted gross margin is useful to investors in
evaluating the Company’s performance because each measure considers
the performance of the Company’s operations, excluding decisions
made with respect to capital investment, financing and other
non-recurring charges as outlined in the preceding paragraph.
Danimer believes these non-GAAP metrics offer additional financial
information that, when coupled with the GAAP results and the
reconciliation to GAAP results, provides a more complete
understanding of its results of operations and the factors and
trends affecting its business.
Adjusted EBITDA, Adjusted gross profit and Adjusted gross margin
should not be considered as an alternative to net income or loss as
an indicator of its performance or as alternatives to any other
measure prescribed by GAAP as there are limitations to using such
non-GAAP measures. Although Danimer believes that Adjusted EBITDA,
Adjusted gross profit and Adjusted gross margin may enhance an
evaluation of its operating performance based on recent revenue
generation and product/overhead cost control because it excludes
the impact of prior decisions made about capital investment,
financing and other expenses, (i) other companies in Danimer’s
industry may define Adjusted EBITDA, Adjusted gross profit and
Adjusted gross margin differently than Danimer does and, as a
result, they may not be comparable to similarly titled measures
used by other companies in its industry, and (ii) Adjusted EBITDA,
Adjusted gross profit and Adjusted gross margin exclude certain
financial information that some may consider important in
evaluating Danimer’s performance.
Danimer compensates for these limitations by providing
disclosure of the differences between Adjusted EBITDA, Adjusted
gross profit and Adjusted gross margin and GAAP results, including
providing a reconciliation to GAAP results, to enable investors to
perform their own analysis of Danimer’s operating results. Because
GAAP financial measures on a forward-looking basis are not
accessible, and reconciling information is not available without
unreasonable effort, reconciliations to GAAP financial measures are
not provided for forward-looking non-GAAP measures. For the same
reasons, the Company is unable to address the probable significance
of the unavailable information, which could be material to future
results.
Danimer Scientific,
Inc.
Reconciliation of Adjusted
EBITDA to Net Loss (Unaudited)
Three Months Ended December
31,
Twelve Months Ended December
31,
2023
2022
2023
2022
(in thousands)
Net loss
$ (39,434)
$ (28,051)
$ (155,473)
$ (179,758)
Stock-based compensation
12,906
14,218
55,839
56,768
Interest, net
8,509
(474)
29,641
1,723
Depreciation and amortization
7,372
7,281
29,377
20,453
Gain on remeasurement of private warrants
(108)
(752)
(207)
(9,366)
Income taxes
2
(43)
319
(810)
Litigation and other legal related
84
146
207
2,082
Inventory reserve
-
(495)
-
-
Loss on extinguishment of royalty agreement
-
-
549
-
Strategic reorganization and related
-
-
410
-
Loss on sale of assets
-
-
246
1
Loss on loan extinguishment
-
-
102
1,500
Impairment of goodwill
-
-
-
62,663
Public company transition costs
-
-
-
481
Other, net
-
(399)
-
(723)
Adjusted EBITDA
$ (10,669)
$ (8,569)
$ (38,990)
$ (44,986)
Reconciliation of Adjusted
Gross Profit to Gross Profit (Unaudited)
Three Months Ended December
31,
Twelve Months Ended December
31,
2023
2022
2023
2022
(in thousands) Total revenue
$
10,945
$
15,324
$
46,684
$
53,218
Cost of revenue
17,317
18,026
73,644
63,632
Gross profit
(6,372
)
(2,702
)
(26,960
)
(10,414
)
Depreciation
5,153
5,161
20,386
12,249
Inventory reserve
-
(495
)
-
-
Loss on sale of assets
-
-
77
-
Stock-based compensation
2
-
10
60
Adjusted gross profit
$
(1,217
)
$
1,964
$
(6,487
)
$
1,895
Adjusted gross margin
-11.1
%
12.8
%
-13.9
%
3.6
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240328566875/en/
Investors Blake Chamblee Phone: 770-337-6570 ir@danimer.com
Media Richard Ivey Phone: 229-254-7688 rivey@danimer.com
Danimer Scientific (NYSE:DNMR)
Historical Stock Chart
From Apr 2024 to May 2024
Danimer Scientific (NYSE:DNMR)
Historical Stock Chart
From May 2023 to May 2024